Consumer Behavior in LG Electronic Company

This report analyzes the consumer behavior in LG Electronic Company and its market strategy in the sector of air conditioners. It discusses the segmentation, target, and positioning strategies adopted by the company. The report also provides recommendations for improving the company's market strategy.

Running Head: CONSUMER BEHAVIOR 0
LG Electronic Company
Marketing Strategy
Report
Student
6/1/2019

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Executive Summary
In the old times, in the summer season to save their energy, people used to sit under the fan or
coolers, as there was not so much invention. However, due to the rise in temperature, it becomes
difficult for people to survive in such hot weather. To deal with such an issue, Many companies
identified the need for air conditioners in which LG Electronics emerged as the best brand who
not provided the best cooling system, but also found an innovative way of saving the energy.
However, with the increase in the competition, the trade of LG is not going that great and the
qualities of its Air conditioners are degrading. Therefore, improve the quality the company has to
analyze its market strategy. The focus of this report will be on the current market strategy
followed by the company in the sector of air conditioners, the major issues faced by them and
what are the steps taken to improve their conditions.

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Contents
A. Critical Analysis..............................................................................................................................3
B. Current Market Strategy..................................................................................................................3
I. Segmentation:..............................................................................................................................4
 Demographic:..........................................................................................................................4
 Geographic:..............................................................................................................................4
 Psychographic:.........................................................................................................................5
II. Target:..........................................................................................................................................6
III. Positioning:..................................................................................................................................6
IV. Market communication mix:........................................................................................................7
 Advertising..............................................................................................................................7
 Digital marketing:....................................................................................................................7
 Packaging, after services and offers:.......................................................................................8
C. Recommendation.............................................................................................................................8
Bibliography........................................................................................................................................11

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A. LG Air Conditioners
Today many electronics companies are operating to make a difference in the lives of an
individual in which LG has emerged as a most successful company that has outperformed other
electronic brands. Established as a Seoul based electronics company, it has been manufacturing
since 1958 (Anon., 2016). LG is a most demanded brand that aims to become the no.1 choice of
its customer by developing, and creating the best quality products at a feasible cost so that it can
enhance their lifestyle. It has brought advancement in the life of its customer by launching and
pioneering the new technology of air conditioners products like Split a/c, Portable air
conditioners, and window AC. This year LG has launched "Dual Cool Inverter technology"
(Anon., 2019) and installed Mosquito away technology in the system of air conditioners so with
the efficient cooling (Anon., 2019). It will protect the environment from the infection of
Mosquitoes. Moreover, in the coming season of monsoon, Air conditioners will regulate the
function reducing the humidity in the room so that an efficient system can be maintained. In the
market of electronic industry, until know, LG has 118 branch companies with 75000
management staff who are putting their efforts to meet the needs and wants of the customers
(Anon., 2019)
However, with the commercialization and globalization, the company has excelled in the trade of
air conditioners and has outperformed its competitors like Hitachi, Samsung and Bosch has
entered in the market of electronic industry and is giving cutthroat competition to LG (Anon.,
2019). These companies are the developing best air conditioners for their customers and have
brought variations. Therefore, to dominate the whole market, LG should make various
modifications in its market strategy and communication techniques so that it can deliver value to
its customers through its unique products and services

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A. Critical Analysis
Evaluation of Survey
To identify the demand of LG central air conditioners the survey was conducted in which 15
participated. The analysis was done that out 15 consumers in which 60% of the like to
purchase the air conditioners from its retail outlet. However, for the five customers out of 10
customers were somewhat satisfied with the products and its after-sales service. Furthermore,
90% of the customers like to purchase the product again but 10% of the people indicated that
management requires an understanding of the taste and style of each segment. Based on the
survey, a critical analysis will be conducted to focus on the future market. Hence, through the
survey, the idea can be made that all the participants are fully satisfied and are interested to
be its permanent customer.
B. Current Market Strategy
As per the employee point of view, it was observed that while catering to other segments the
company identified problems of global warming, due to which there is a huge rise in the
temperature during the summer season. Such a change in the temperature was not only disturbing
the environment but also affect the health of the consumers. To solve the problem the company
has launched air conditioners. From the Window A/c to the split central air conditioning to the
trend of portable air conditioner and now in 2019, the company has entered with the new range
of dual inverter conditioner the company has shown tremendous growth. Furthermore, in the
overall market of electronics, the company has made its mark by entering into the top 100
powerful brands. However, to make its products more popular and approachable, the company
has an adopted market strategy (Anon., 2016). LG today is recognized as a brand that has

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secured its place in the heart of the consumers with its polished and stylish air conditioners.
Furthermore, the goal is to enhance the lives of its consumers by serving them the best cooling
treatment so that they can remain energetic in the hot weather. To reach the customers the large
scale LG has adopted the STP strategy to analyze the market. STP stands for Segmentation,
Target, and positioning. LG mission is to gain victory in the field of central air conditioning.
I. Segmentation:
In segmentation, the vast market is split into the small-scale market so that individuals with
equivalent needs and wants can be group together. is further divided in:
 Demographic:
According to the need in the retail market of air conditioners, LG is focusing on the age group
from the kids' to the 50-year-old population. Moreover, the company is focusing to satisfy the
needs of the middle and upper middle class. Attributing to the demand for air conditioners in all
the weather season, the significant increment has been seen in its usage. However, the premium
customers are resorts, educational institutions and dwelling houses, and offices.
 Geographic:
Electronic Company like LG has expanded its business on the global level by employing 75000
management staff and now they are exporting air conditioners technology not only in South
Korea but also in America, Europe and in Asia. However, they are dominating the electronics
industry in India. Management of LG is expecting to make to India as its exporting partner. In
2017 in the Indian market, LG has shown tremendous sales growth of 10%.In the summer season
in India, this Korean company is focusing to acquire a 40% share in the market of Inverter

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technology A/C (Mukherjee, 2019). In the Indian market, the company is coming with the
commercial air conditioners, which is a high-technical magnetic chiller (James, 2019). This
product is being appraised in countries like Korea, Europe, and East Asia and South Africa. With
great energy saving and powerful cooling technology, the company will be launching a range of
new products. (Anon., 2019)
 Psychographic:
With the motto of "Life is good", the company is serving its customers all the season so they can
live a comfortable life and stay energetic through their long working hours. In the retail marketed
by air conditioners, LG is expecting to introduce its prime air-cooling system products. The
company knows that the consumers prefer to purchase a quality product, therefore LG has
brought the cost-effective 54 prime air conditioner models with an efficiency rating of 5 and 3.
This technology is known for its fast cooling system which can refresh the room with the chilling
rating of 5. Furthermore, LG must introduce pocket-friendly products that can meet the needs of
the consumer who are more concerned about the price and loss of energy. Employees of LG
should use convincing strategies and loyalty programs to attract customers. To promote its
products in the market employees must introduce the offers system and attracting competitions.
For the company regular customers, employees must introduce discount coupons for its members
can get rebates on their future purchases.
The USP of this product is that the quality of cooling will remain the same even when the
consumers' won't make any changes in the cooling temperature and this can be done by
managing the compressor speed (Anon., 2019). In the LG air conditioners, customers are ready
to invest in its product, as they believe in its brand loyalty, therefore the company must best

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services to its buyers at its every store.
II. Target:
The company has decided its marketing strategy taking into view the various ranges of products
it offers to the consumers. Their audiences are those segments who want the best product which
can best be cooling while the efficient utilization at feasible prices. Therefore, to cater to their
needs, the company has done innovative developments in the products. For the mid segment,
during the season of summer, LG has manufactured Air conditioner and other home appliances.
III. Positioning:
Source: (Anon., 2019)

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If the consumers are looking for the best window Ac with advanced technology which can
save the energy, then the consumers must try Window AC inverter of LG which is a first-
ever inverter technology with the great compressor speed (Anon., 2017). Along with its
feature of cooling, it has an inbuilt Wi-Fi system that can be easily controlled by
smartphones. The basic cooling capacity is 5000 watts (or 1.42 tons) LG will be re-entering
with the range of prime products like home-related appliances and air conditioners.
Therefore, in the beginning, the cost will be high but gradually it will become the feasible
cost after some time. In 2019, For the 5-star air conditioners, the company has made its
pricing policy more attractive so they reach a mass number of people Today generation
audience like to spend their time searching sites, therefore the company has launched internet
connected fans (Anon., 2018).
IV. Market communication mix:
Marketing is a never-ending process, which begins from the productions of consumer needs to its
communication and distribution. The four techniques are:
 Advertising
Advertising is the most efficient way to connect with customers. It is a paid form of
communicating the message about the products and services to the target audience. Since
promotions and advertisements are the paid medium. Therefore, for the effective response, every
company prepares its advertisement budget. To promote its air conditioners, and fans, the
company conducted advertising campaigns on a large scale throughout elections and the famous
cricket (ad Age India, 2018). To promote its product in India, during the summer season, the
company uses the commercial adds and endorses its products by collaborating with the film stars

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like Shahrukh Khan. To attract the attention of the public on a large scale, the company must
train its advertisement employees by giving on the field training so they understand the
consumer’s attitude and behavior.
 Digital marketing:
In the modern world, social media has become an important part of everybody's lifestyle.
Moreover, the trend of online purchasing and buying has become popular all over the world.
Now customers are preferring to purchase from the online sites rather than going for the
window-shopping. Attributing to this company must recruit those individual knows how to
operate social media. It gives an opportunity to the brands so that they can connect with their
consumers. By online survey, it can attract the attention of consumers and ask their reviews so
that according to them they can make modification in their strategies.
 Packaging, after services and offers:
According to the psychological needs of the consumers, the company has an innovative service n
and provides the best after-sales services. The company maintains flexibility in their working and
provides customized solutions to the problem. Employees must follow the proper packaging
system while supplying the air conditioners, as there is a risk of permanent damage. Travel
services are a particular little costly than other repairs. Furthermore, we provide customers with a
standby unit. In addition, unlike some of our competitors who import Ac we manufacture all of
them in India and as a result, never have an issue with spare parts. In the summers, the company
is also giving discounts. Through its attracting offers like with LG AC's the company is
providing 5 years insurance policy worth of Rs.50,000/- to its favorite customers (Anon., 2019).
This summer Season, the company has brought an innovative solution for its customers who are

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facing the issue while old ACS. LG promotes eco-friendly business operations so they encourage
exchange offers in its AC segments products and replace the old AC with LG DUAL cool
Inverter Air cooling system (Anon., 2019)
C. Recommendation
I. It can suggest that there should be a proper management system in the company,
emphasis on all segments and satisfy their needs. For the middle business people, the
company must introduce air conditioners with the best quality at reasonable prices, which
does not troubleshoot so that they can afford the products easily. For the company
innovation and technology is a nervous system and launch the best products. Therefore,
to give the stiff competition the company must hire professional people so at the time of
repairing customers do not have to pay such amount. The companies can secure the
interest of the customer. To create an eco-friendly environment LG must manufacture
goods that do not affect the environment. To improve the brand image LG has to make
significant changes in its pricing advertisement policy. In addition, with such
modifications company can conquer and can reach its customers in the most feasible way.
II. The company must focus on its fastening cooling system and should install the
innovative technology so that the cooling efficiency of its air-cooling system can be
increased with 50%. Since the customers are interested to purchase those products,
through which energy can be saved in a more effective way. LG must design its product
in a way that the energy can be saved in the most well-organized way.
III. During the summer season, due to the rise of hot and humid weather, most of LG
AC's becomes ineffective (Blair , n.d.). Therefore, the company must prepare the shield
so it can protect the AC machines from the harmful Ultra Violet rays. Through the shield,

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those harmful rays will bounce back and will not influence the functioning of the cooling
system. Moreover, the leakage of water will be stopped.
IV. In the advertisement sector, the company must promote its air-conditioner products
by preparing the documentary film where the company can show the real-life experience
of its consumers while using air conditioners. Through such documentary films, people
will connect with the company.
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